Austin Hawley, CFA
It has been a pretty exciting start to the third quarter here, both with the CPI report in early July and then the market selloff in August. The short answer is yes, we did actually have some activity in the portfolio that was directly related to some of that volatility, especially in early August. And frankly, we would've liked to have some more activity, but the window to act turned out to be very short during that August selloff. If you look at what happened in August, the broad indices, so if you think about the Russell 3000 as a broad index, was down roughly 6.5% over three days beginning on August 1st. But then if you look at what happened over the next two weeks, the market just steadily moved higher to the point where today we're close to all-time highs again on the broad indices.
And those markets were actually up I think 10 out of 14 days after that initial volatility. So, if you didn't act in a very bold way initially when the market sold off, if you weren't completely prepared, it was hard to get stuff done over the next couple of weeks as the markets moved up. So, we've talked a lot about how we try to be opportunistic in the Select strategy and you'll see our turnover move around a little bit more during periods of market volatility. And that was the case here, but in a more modest way. And usually when we're trying to take advantage of the volatility, it's usually one of two things. We're either trying to initiate new positions that we think are more attractive than something else we own in the portfolio or actively trying to reposition within the names we own to what we find most attractive at any point in time.
And we actually had a little bit of both of those scenarios. We had started to buy a couple new positions in the Select strategy in the second quarter, and those names, or in July, I should say, both International Paper and Builders FirstSource. And we didn't finish those positions initially because the prices started to move up on us. That selloff in August gave us an opportunity to finish those positions and get them to full positions in the portfolio. So, using that volatility to get better prices for those new positions.
The second thing we did was reposition a little bit within the names we already own. And if you look from the end of the second quarter through the depths of those first few days in August, the area that sold off by far the most was the growth-oriented names. And so, when we looked in our portfolio, the two that we found to be attractive on a relative basis in early August were Amazon and then Coherent. And those are two of our more growth-oriented names. Those names were down 20 to 25% from the end of the second quarter. So, a pretty meaningful move for those companies and we bought a pretty meaningful additional stake in each of those companies during that selloff in August . So not a ton of activity, but definitely we were trying to make the most of that period of time. If it had gone on a few days longer, I think we would've gotten even more done, but very happy that we were prepared to take action during that brief selloff.